Adnoc Distribution, the UAE's largest fuel retailer, said first-quarter net profit surged 58 per cent from the same period a year earlier on the back of growth in the company's fuel retail and commercial segments as expenses and impairments decreased.
Profit for the first three months of the year reached Dh631 million ($171.8m) from Dh400m for the same period last year, the company said in a regulatory filing on Monday to the Abu Dhabi Securities Exchange, where its shares trade.
"We have continued to build on our success in 2020, to record a strong financial performance," said Adnoc Distribution acting chief executive Ahmed Al Shamsi.
"This has provided the company with ample liquidity to pursue future growth opportunities, be they organic or inorganic in domestic and international markets."
Total revenue fell 13 per cent to Dh4.2 billion in the first quarter. The company's free cash flow rose 57 per cent to Dh835m in the first quarter driven by strong cash flow from operations and positive working capital movement. Capital expenditure fell 2.5 per cent to reach Dh180m.
Gross profit in the company's retail business (fuel and non-fuel) increased 10.1 per cent year-on-year.
The company plans to continue expanding its footprint in the UAE and abroad, with robust cash flows. Adnoc Distribution's strong performance boosted the company's liquidity to Dh5.1bn, with Dh2.3bn cash and cash equivalents, with the remainder held in unutilised credit facility.
The company plans to "accelerate delivery momentum" and open a total of 70 to 80 new stations across the UAE and Saudi Arabia by year-end.
"Our focus on creating shareholder value continued in the first quarter of 2021 and we remain committed to providing strong dividend visibility,” Mr Al Shamsi said.
Adnoc Distribution opened four new stations in the UAE in the first quarter of 2021. Plans are underway to add 30-45 stations domestically this year.
In Saudi Arabia, the Abu Dhabi company is building on earlier agreements to acquire fuel stations that will expand its portfolio in the kingdom to 37 units.
In March, the company's shareholders approved a proposal to increase the company's dividend by 7.5 per cent for 2020 and to maintain a similar pay-out for the next two years.
Investors agreed to a Dh1.285bn pay-out for the second half of 2020, bringing the full-year dividend to Dh2.57bn, or 20.57 fils per share. They also agreed to a policy to pay out at least the same amount in 2021 and 2022, with dividends in future years reverting to a minimum of 75 per cent of distributable profits.
The new dividend policy recognises the company's strong financial and cash flow position at the end of the financial year 2020, it said in a statement to the ADX.
